The Lucid Analytics Project's 'Thoughtful AI' series investigates the risks that arise with the increasing embrace of AI across the global economy - and how these risks could be managed to better realise the opportunities.
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In the first report of the series, we examine the financial services industry by consulting with industry leaders, risk managers, challengers and regulators. |
Synopsis: Thoughtful AI for financial services
There is widespread excitement about the potential for artificial intelligence and machine learning to revolutionise financial services – not just at the fringes of the industry, but to overhaul business models at mainstream institutions that touch billions of people worldwide.
But is the financial world prepared for such sweeping changes? Proponents of AI/ML applications in financial services cite myriad benefits to institutions and their customers, often backed by strong evidence. But these technologies are typically opaque, and many financial professionals – including top executives – cannot critically evaluate them. Not least, this is because many of these risks and negative externalities are not intuitive.
This means that leadership team teams must often make the strategic decision to deploy them without the ability to effectively weigh the risks.
This report has two objectives:
But is the financial world prepared for such sweeping changes? Proponents of AI/ML applications in financial services cite myriad benefits to institutions and their customers, often backed by strong evidence. But these technologies are typically opaque, and many financial professionals – including top executives – cannot critically evaluate them. Not least, this is because many of these risks and negative externalities are not intuitive.
This means that leadership team teams must often make the strategic decision to deploy them without the ability to effectively weigh the risks.
This report has two objectives:
- To provide a broad and representative analysis of these risks - what they are, and how and where they might arise in the financial services industry.
- To help readers develop a framework with which to understand unfamiliar AI applications, and an intuition for the risks that might arise.